TAXES WILL BE CUT IN NO-DEAL BREXIT
Big boost for business and families if EU wrecks talks, says Cabinet source
RADICAL tax cuts for families and businesses could be introduced to turbocharge the economy if Britain quits the EU without a deal.
Corporation tax would be halved and millions would see their income tax slashed under the move to attract new investment to the UK if Brussels’ intransigence wrecks the talks.
Legislation needed in the event of a nodeal departure has also been fully drafted and is ready to go to Parliament. And in a fresh sign that preparations for such an exit are being stepped up, firms across the country will be sent detailed advice within the next fortnight.
News of the latest precautionary moves comes amid growing frustration within the Cabinet at the EU’s failure to open talks over Theresa May’s Brexit proposals. It
followed a warning to Brussels from Chancellor Philip Hammond at the Tory conference yesterday that Britain has the “fiscal firepower” to respond to a no-deal exit.
He also promised that Britain can expect an economic boost with a “deal dividend” if the Prime Minister succeeds in her push.
Mr Hammond and other Cabinet ministers signalled their support for her plan in a series of speeches at the conference in Birmingham.
“Over the next few weeks we must stand together four-square behind the PM to get the best possible outcome for Britain,” he told the Tory faithful in his keynote speech.
A Cabinet source yesterday said tax cuts are being discussed as preparations for a no-deal Brexit are being stepped up. “We could halve corporation tax and slash personal income tax,” the source said.
On the same theme, Home Secretary Sajid Javid last night said Britain’s £40billion EU divorce bill should be spent on tax cuts if there is no deal.
“I would give this back to the people, they are taxed enough as it is,” he told a conference fringe meeting.
And Brexit Secretary Dominic Raab last night spoke openly about slashing corporation tax in the event of a no-deal. He said the business levy could be reduced to 10 per cent “to pull every lever we have got to see us through what short term buffeting or disruption we have”.
Corporation tax is currently 19 per cent and is due to fall to 18 per cent in April 2020.
The source said that concern was growing among Cabinet ministers at the foot-dragging in Brussels in responding to Mrs May.
So far the EU has failed to reply to her request for details of its objections to her Chequers plan.
As time needed for Parliament to vote on any new deal is running short, the Government is stepping up preparations. “We have a stack of no-deal legislation all written and ready to go,” the source said.
Proposals for new laws for border controls, reciprocal healthcare arrangements and other issues have been fully drafted and are ready to go before the Commons.
The source added: “We’ll also be sending notes to business on the preparations they need to make within the next week.”
Some ministers suspect that a lingering belief among some Brussels officials that Brexit will be cancelled is behind the delay. Many people in the EU are being misled by all the talk of a second referendum, which is simply not going to happen.
“They don’t understand. We will leave next March,” the source said. In his speech yesterday, the Chancellor said the Government remained determined to agree a deal.
He added: “I share the Prime Minister’s determination to get the Chequers plan agreed, a plan which delivers on the decision of the British people, avoids a hard border in Ireland, preserves our precious union and safeguards British jobs and British businesses,”
He hit out at EU Council president Donald Tusk, saying: “Mr Tusk says it won’t work but that’s what people said about the light bulb in 1878. Our job is to prove him wrong.
“Negotiating and preparing for Brexit is one of the most complex tasks ever undertaken by a peacetime government.
“So over the next few weeks we must stand together four-square behind the PM to get the best possible outcome for Britain while at the same time taking the precaution of preparing for the possibility of no deal.
“And be in no doubt I will maintain enough fiscal firepower to support our economy if that happens.
“I’m going to stick my neck out here today and make a prediction to you that when the Prime Minister gets a deal agreed there will be a boost to our economic growth, a ‘deal dividend’ which we will share, in line with our balanced approach between keeping taxes low, supporting public services, reducing the deficit and investing in Britain’s future.”
BRITAIN, said the Chancellor Philip Hammond at the Conservative Party Conference in Birmingham, has the “fiscal firepower” to cope with a “no-deal” Brexit. He also promised that implementation of the Chequers plan would deliver “a boost to our economic growth – a deal dividend”.
But today we also report that ministers have finalised a programme of emergency legislation that will enable us to leave the EU if there is no deal. This is written, ready to go and can be presented to Parliament without delay.
Over the next two weeks businesses will receive advice on how to prepare for a no-deal Brexit. This will be highly detailed – making sure international driving licences are up to date, for instance. This is both of immense practical use and also sends a message to Brussels to stop dragging its feet. Some Eurocrats may still be under the impression that Brexit will be cancelled. This detailed programme should make them think again.
In the longer term the Government would look at cutting taxes for families and business to stimulate the economy in a no-deal Brexit Britain.
Since the referendum in 2016 it has often seemed that there have been few practical moves towards making Brexit a smoothly run operation. Good to know that there has been much activity behind the scenes – now bearing fruit.